We found out that our little puppy does have parvo:( My question is, what exactly is Parvo? What does it do to the dogs body and can it be cured? Or can we make it any better? Or is it too late? Please help!

I am sorry to hear that your puppy has Parvo. Parvo is a hearty virus that can live in the environment for years. It attacks the digestive system, causing the lining of the intestines to die and slough resulting in the vomiting and diarrhea.(Hence the bloody, foul smelling stools) That is the condensed version here is some more reading http://marvistavet.com/html/treatment.html

Optimal treatment would be at a veterinary clinic with IV fluids, antibiotics, and meds to control nausea.
This can get very costly and there is no 100% guarantee that your pup will survive.

Unfortunately, being a small dog he can go downhill very rapidly.
I am not suggesting this as an alternative treatment by any means because your pup needs medical care, but you need to try and syringe something into him like Gatorade or pedialyte. This will at least help to keep him hydrated and keep some needed electrolytes in check, given that he can keep it down.
If you cannot afford to have him treated for the virus, then perhaps you know someone who can, turn him over to them and relinquish your rights to him.
However things turn out for you, you will need to clean, clean, and clean some more.
And being that parvovirus is so hearty, before you bring any more dogs into your home you will need to insure that they have had a full set of 3 distemper/parvo vaccines and a parvo booster.
Please don't expose another unprotected puppy to this disease.
There is much more information on the site where that link will take you, It explains in more depth.
I wish you and your pup well.
I am also assuming that if you know it is parvo that you have taken him in for testing what did they tell you?

I am not exactly sure what parvo is. In the past we had a doxin that had parvo, we made sure to keep her separated from our other dogs, and kept her hydrated. We gave her gatorade since it has planty of electrolytes.

Canine parvious type 2 (cpv2) collugily parvo is a contagiuos virus mainly affecting dogs.the disease is highly contagious and is spread from dog to dog by direct or indirect with their feces.it can be esspecialy severe in puppies that are not protected by matenal antibodies or vaccination.it has 2 distinct presentations a cardiac and intestinal form.the common signs of the intestinal form are severe vomiting and dysentry.the cardiac form causes respiratery or cardivascular faliure in young puppies.treatment often involves veterinary hosptalation.vaccines can prevent this inffection but mortality can reach 91% in untreated cases.canine parvo will not infect humans.parvo cpv2 is a relatively new disease that appeared in the 1970s.it was first regonised in 1978 and spread worldwide in one to two years.the virus is very similar to to feline panelukia also a parvo they are 98% identical differing only in two amino acids in the viral capsid protein vp2.it is also highly similar to mink enteris and the parvo of racoons and foxes.the early belief was that the feline parvo mutated into cpv2.it is possible that cpv2 is a mutant of unidentified parvo similar to feline parvo fpv of some wild carnivore.a strain of cbv2b strain fb84 has been shown to cause disease in a small percentage in domestic cats although vaccnation for fvp seems to be protective.cpv2 however does not cause disease in cats an does so only midly in mink and racoons and is a virus almost always affecting canines.im so sorry what has happened get her to a vet as soon as possible but they is only a small chance of her surviving.keep us updated I hope your dog is okay and good luck.